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Posted by on May 21, 2013 in Saving & Investing | 0 comments

Invest in energy rather than defence

Invest in energy rather than defence

Austerity is something this coalition government will be remembered for more than anything else. Making significant cuts to areas including healthcare, benefits and the environmental budget are just some of the factors that’ll put them in the history books, but there are one or two areas which have been spared the axe, most notably the money spent on defence.

The nuclear option

The Ministry of Defence receives around £40bn a year, a significant amount compared to other departments. By contrast, the Department of Energy and Climate Change gets just £4bn in state funding despite their importance, and more than half their funding goes towards cleaning old nuclear plants.

Part of the reason why so much is being spent on defence is the investment in nuclear technology, and it’s no secret that the government are considering pushing nuclear power as a future means of generating the power needed to keep the country running. However, it’s likely that nuclear power alone might not be enough to replace outmoded coal and gas plants.

Energy firms put profit over investment

The government ultimately hold responsibility for the maintenance of the UK’s energy supply, but it seems that many of the country’s largest energy suppliers aren’t doing as much as they should, rather they’re putting profit first. Centrica, owners of British Gas, are perhaps more guilty than others.

They revealed group profits of £2.7bn and £600m profit for British Gas despite announcing significant price rises for their customers.

Government ignoring renewables?

“Although British Gas has a role to play, the government have the bulk of the responsibility. Energy and climate change secretary Ed Davey recently said he sought to create a “level playing field” for all energy technologies, but spending figures suggest that nuclear is their first option.

“It’s hugely important that government gets this right, because the more diverse our energy supply is, the less we’ll rely on imported energy and the more consumers – in households and businesses – will be protected against global fossil fuel price spikes”, they added.

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